Fast‑track settlement mechanism introduced for securities fraud cases

In a move to curb prolonged legal battles, SEBI approved a fast‑track settlement procedure for specific securities fraud matters during its latest board session. The mechanism uses a predefined calculation method to arrive at a settlement figure, streamlining the process for both regulators and the entities involved.

When a reason‑show‑cause notice is served, SEBI will follow up with a settlement notice. The recipient then has 60 days to submit a settlement application. The final amount may incorporate several times the prescribed penalty, plus any required restitution and regulatory compliance measures (RRTs).

According to Chairman Pandey, the new approach does not imply admission of guilt but ensures that financial repercussions are promptly imposed, facilitating quicker resolution for investors. The regulator also anticipates that the revised rules will reduce the administrative burden on courts and improve market confidence.

The changes will take effect 30 days after the official notification, and SEBI will monitor whether listed companies need to disclose settlement notices separately from standard show‑cause notices.